Guotai Haitong: Delayed recovery in petrochemical supply combined with continued inventory drawdown makes Q4 oil prices more likely to rise than fall.

Guotai Haitong released a research report stating that in August, international oil prices generally moved upward, geopolitical disruptions intensified, and global inventories continued to draw down. In Q4, supply expectations were further revised downward, with geopolitical risks and low inventories providing support for oil prices, but the negative feedback from high oil prices on demand gradually emerged. The three major agencies' demand forecasts diverged: IEA and EIA expect demand to decline in 2026, while OPEC expects growth to be maintained. Oil prices are expected to remain strong in a volatile range, and companies in the upstream sector are recommended, as well as companies benefiting from alternative routes. The main views of Guotai Haitong are as follows: Oil price view: Geopolitics remain volatile, the strait reopening process has been full of twists and turns, and with inventory drawdowns maintained, prices are more likely to rise than fall, keeping prices in a state with a ceiling above and a floor below. The tendency to rise rather than fall is due to: (1) repeated geopolitical tensions, repeated delays in the strait reopening process, and low crude oil inventories in many parts of the world over time; (2) shipping through the Bab-el-Mandeb Strait has also been affected, Saudi Arabia's East-West Pipeline was attacked, and Middle East export volumes have declined further; (3) earlier buffer measures may change, including the IEA's inventory release nearing its end, the restoration of Russia sanctions, and an increase in China's crude oil imports. The upside is capped by: (1) the peak refined product demand season is about to pass; (2) with the midterm elections approaching, the probability of intensified geopolitics is relatively low; (3) Asian refinery margins have deteriorated, and purchasing behavior may slow. Supply side: Q3 supply forecasts diverged, Q4 supply forecasts were revised down. Global total crude oil supply in 2026 is 100.7 and 100.6 million barrels per day, respectively, down 5.7 and 5.62 million barrels per day year-on-year, adjusted by -1.3 and -0.2 million barrels per day compared with last month's forecast. IEA and EIA forecast global crude oil supply in 2027 at 108.7 and 109.88 million barrels per day, respectively, down 1.6 and up 0.1 million barrels per day year-on-year. According to IEA and EIA forecasts, global total crude oil supply in 2026Q3-Q4 is 100.9, 101.7 and 100.3, 102.2 million barrels per day, respectively, adjusted by -0.4, -4.9 and +0.6, -1.5 million barrels per day compared with last month. Among these, Q3 supply forecasts diverged: EIA slightly raised its near-term supply forecast, while IEA lowered its forecast due to Middle East supply disruptions; in Q4, due to continued Middle East export constraints and delayed supply recovery in the Gulf region, both IEA and EIA lowered their supply forecasts. Demand side: The three major agencies' demand forecasts diverged, with IEA and EIA expecting demand to decline in 2026, while OPEC expects growth to be maintained. According to forecasts by IEA, EIA, and OPEC, global total crude oil demand in 2026 is 102.45, 102.59, and 105.7 million barrels per day, respectively, down 1.98, down 1.37, and up 0.69 million barrels per day year-on-year, adjusted by -0.85, -0.14, and -0.05 million barrels per day compared with last month's forecast. According to forecasts by IEA, EIA, and OPEC, the average global total crude oil demand in 2026Q1-Q4 is 104.53, 100.76, 104.01, and 105.19 million barrels per day, respectively, adjusted by 0.13, -0.15, -0.26, and -0.94 million barrels per day compared with last month. Affected by high prices, demand destruction occurred in Q2, and the negative feedback effect has gradually slowed as it was delayed. Inventory side: Inventories are expected to continue drawing down in 2026, and Q4 supply-demand expectations are clearly tightening. IEA and EIA expect global crude oil supply to remain generally tight in 2026, with full-year supply-demand balances of -1.7 and -1.9 million barrels per day, adjusted by -0.42 and -0.03 million barrels per day, respectively, indicating a larger inventory drawdown. Global crude oil market supply-demand balances in 26Q3-26Q4 are expected to be -1.6, -2.2 million barrels per day and -2.93, -1.66 million barrels per day, respectively. IEA and IEA revised the Q3 supply-demand gap upward from the previous period, indicating marginal easing, while both clearly revised Q4 downward, showing that the two agencies' judgment of the year-end supply-demand pattern has further tightened. Risk warnings: Large fluctuations in crude oil prices; changes in OPEC+ production policy; excessively fast production growth in non-OPEC+ oil-producing countries; slowing global economic growth and declining crude oil demand; changes in the geopolitical situation, etc.